North Dakota tribes' oil output rivals US states

NEW TOWN, N.D. (AP) — Oil production on the Fort Berthold Indian Reservation in North Dakota has become so large that it would rank among the top 10 oil producing states in the nation, a tribal leader said Tuesday.

Tex Hall, chairman of the Three Affiliated Tribes — Mandan, Hidatsa and Arikara — said the more than 1,000 wells in the Fort Berthold Indian Reservation produce in excess of 180,000 barrels of oil a day. Compared directly with state production, that puts them among the top 10 oil producers in the nation.

"It's a modern day gold rush. It's a modern day Deadwood, South Dakota," he said in a video statement that was broadcast at the tribe's third annual oil and gas expo at the 4 Bears Casino in New Town, North Dakota.

The tribe's production levels represent about one-fifth of the total oil output in North Dakota, which is ranked second in oil production, trailing only Texas. North Dakota is poised to hit production levels of one million barrels of oil per day by June.

In January, wells on the Fort Berthold Indian Reservation produced more than 162,000 barrels of oil per day, according to the latest production figures available on the tribes' website. That figure was higher than production in Kansas, which is the 10th biggest oil-producing state.

Hall did not say how much money the tribes have made from the oil production, but North Dakota state Tax Department records show that the tribe received $131.8 million in fiscal 2013 as its share of revenue under an agreement with the state.

"Energy development is a critical tool for tribal economic development. It gives tribes the means to improve the safety of their communities, create affordable housing options and tackle education and health disparities," she said in a statement.

Hall noted that the future of the tribes lies not only in oil production, but also in energy generation, such as capturing natural gas. North Dakota drillers currently burn off, or flare, more than 30 percent of the valuable gas — compared to the national average of less than 1 percent — because the development of gas pipelines and processing facilities hasn't kept pace with oil drilling.

The tribes are also building a $450 million oil refinery that will be capable of processing 20,000 barrels of oil per day.

"All of this power that is here needs to be channeled together and developed to create our own power system," Hall said in his speech.

Hall placed a heavy emphasis on self-reliance through oil development on the first day of the expo, which is being held under the tagline "sovereignty by the barrel."

Oil production in Fort Berthold began with just 30 wells in 2008, growing to around 100 wells in 2009 and eventually reaching the 1,000 or so wells active today.

Today's situation stands in stark contrast to the tribe's recent past, tribal councilman Mervin Packineau said. He said that less than a decade ago, the tribe was struggling financially and forced to take out loans from other tribes.

Lawrence Roberts, deputy assistant director for Indian affairs at the Interior Department, also noted the economic benefits energy development can bring to tribes.

"Within Indian country, energy development is particularly important because some of the areas where there is a wealth of energy resources are areas in Indian country with high unemployment," he said. "I think we're seeing in Fort Berthold is the positive impacts of job development that energy development can bring."

The reservation contains portions of six counties, covering more than 1,500 square miles. About 4,500 of the approximately 12,000 tribal members live on the reservation, tribal officials say.